The Higher Administrative Court of Baden-Württemberg voices serious doubts as to the consistency of politics in the area of games of chance in Germany

Munich, 20 Mar. 2008: In a case represented by the law firm Hambach & Hambach, the Higher Administrative Court of Baden-Württemberg (VGH) allowed an appeal against a dismissive judgement by the Administrative Court (VG) of Karlsruhe. Just as in the previous resolution dated 12 Feb. 2008, leave to appeal was also granted in these parallel proceedings in a resolution dated 3 Mar. 2008 (ref: 6 S 1408/07), due to substantial doubts as to whether politics regulating games of chance in Germany are implemented in a consistent way.

The plaintiff requested a declaration stating that its licence – issued for Great Britain – is also valid in the German Federal State of Baden-Württemberg, and that this licence is to be regarded as a licence in the sense of section 284 StGB (Strafgesetzbuch – German Criminal Code). The VG of Karlsruhe dismissed the claim, stating as the reason that the sports betting monopoly in Germany was in compliance with European law. It assumed that the restrictions of the freedom of establishment and the freedom to provide services, which resulted from the state monopoly, were implemented in compliance with community law. It was wrong to assume that the VGH in the next instance would back this decision, which is what it had done during the transitional period up until 31 Dec. 2007.

However, the VGH now has an entirely different evaluation of the new legal situation. In its reasons for the decision, the VGH explains that considerable doubts remain with regard to the statements made by the VG on the case, as it had been questioned conclusively in the proceedings whether the evaluation of a consistent and systematic contribution to the limitation of betting activities, which is necessary for a justification of a state monopoly under community law, must be based only on the state’s betting politics or whether it should also be based on the state’s entire politics relating to games of chance.

“Should the latter be the case, or have to be seriously considered, it could not be finally decided on the basis of the determinations made by the Administrative Court, whether the differing restrictions can be justified by the differences existing in the markets for the respective games of chance.”

It can be seen from this comment that the VGH wishes to take the pending statement from the ECJ into consideration for the decision-making process for this judgement. In the meantime, eight cases have been suspended, and questions regarding the interpretation of community law have been submitted to the ECJ requesting a reply (most recently: VG of Schleswig in proceedings in the main action, resolution dated 30 Jan.2008).

This obvious U-turn by the court of appeal is to be welcomed, as the Court had – as recently as November 2007 – been of the opinion that a consistent and systematic restriction of betting politics could be assumed (resolution dated 5 Nov. 2007, 6 S 2223/07 par. 19). This re-alignment can also be noted for other courts of appeal; for instance, the VGH of Hesse also decided in favour of suspensions in similar cases (e.g. ref. 7 A 14/08), as it held that this was the only way to ensure the priority of application of community law.